JPY Trading Outlook (14-05-2014)

USD/JPY Bad news was good news for the USD/JPY after a fashion, as below-f/c US Retail Sales and soft Im/Ex Prices hurt Tsy yields, and the USD for a little while. Eventually, though, the drop in yields fueled fresh demand for stocks, in the US and abroad (save for Italy), which made USD/JPY’s post-data dip toward 102 look like a bargain for those looking to lever up carry trades and bet on Japanese reflation, either with or without QQE2 many expect in H2. Next hurdles are the 61.8% of May’s range and the daily Cloud base at 102.42/44. Talk of light offers, some from exporters, into 102.50 and more so either side of 103. EUR/JPY struggled around the recently pierced but not closed below support by 140 as result of renewed EUR selling on ECB easing expectations; ZEW & BuBa chatter the latest catalysts for EUR selling. The cross needs to retake the 50% Fibo, Tenkan & Kijun hurdles in the 141.12-17 range to shake off the bearish bias since last Thur’s plunge below the up TL from last April’s lows. Japan Corp Prices and Machine Tool Orders for Mar & Apr, respectively, are on tap tonight. Q1 GDP is out Thur along with a raft of EZ & US data.